Brendan Smith (Cavan-Monaghan, Fianna Fail)

The dairy market has been discussed at Council of Ministers meetings every month since March this year. At these meetings, my ministerial colleagues and I have continually pressed the Commission to take all appropriate measures to deal with the situation and this has helped to stabilise the market. The measures taken this year include the restoration of export refunds for dairy products and these were increased twice in June. Intervention for butter and skimmed milk powder has continued beyond the mandatory fixed limits. In July, it was agreed to implement a special measure to extend intervention beyond August to February 2010 and to 2011, if necessary. This provision will be formally adopted at the October Council meeting which will be held in Luxembourg next Monday and Tuesday.

At the last formal Council meeting in September, the Commissioner presented the dairy market report which set out some options for the sector. At that meeting, I joined Ministers from 15 other member states in seeking major improvements in support for hard-pressed dairy farmers. We signed a statement calling for a comprehensive EU approach that would combine immediate short-term measures along with a medium-term strategy to deal with volatility in the milk sector. I attended a special Council meeting last week to look at medium to long-term measures for the dairy sector. At that meeting it was agreed to set up a high level group of member states, chaired by the Commission's agriculture director general, to examine the type of arrangements to be put in place.

The high level group will examine medium and long-term ways of stabilising dairy farmers' incomes and improving market transparency. In its work towards delivering a comprehensive report by June 2010, the group will examine means through which contractual arrangements in the supply chain can contribute to the highest possible returns for producers, giving them more bargaining power in the process and providing a buffer against extremes of market volatility such as those being experienced at present. It will also examine existing market instruments and consider what other means, including a dairy futures market, could contribute to the objective of price stability in the longer term.

Last week, I announced the establishment of a consultative group to advise me on the issues emerging at the high level group. In particular, the ideas, knowledge and expert opinion of the Irish dairy sector will provide key perspectives on how the sector needs to be developed and supported into the future. The consultative group will be representative of all the stakeholders and I will be asking all the main organisations to nominate representatives and these arrangements are being put in place at present.

I also welcomed the commitment given by Commissioner Fischer Boel at last week's special Council to manage the release of stocks from intervention in a prudent manner.

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